By iA Private Wealth, June 11, 2019
Are you heading into your pre-retirement years? You may be wondering how, when and if you should move to safer investments. You’re right to start thinking about potentially transitioning your portfolio to be more income-focused ahead of actually retiring. After all, investing heavily in stocks may be okay when you’re younger and willing to take on more risk for higher returns, since you have time to rebound from market declines. But it can be an aggressive strategy that leaves you vulnerable to severe market downturns as you near the end of your working life.
That doesn’t necessarily mean shunning growth altogether. A healthy 65-year old could easily live well into their 80s and beyond, and that means there’s a real possibility you’ll need 30 years or more of retirement income. Without thoughtful planning, you could easily outlive your savings and be left to rely on government support alone, which likely won’t be enough to cover all your expenses. The key is striking the right balance between growth and security in your portfolio.
What’s the right balance? It depends on your individual financial situation, including:
Living the fixed-income life
As you shift from growth to income in your portfolio, you may also need to shift your mindset. For example, investors comfortable with stocks may have a hard time adjusting to the notion that a mix of securities, such as dividend-, yield- and interest-generating investments, might better achieve their income goals – even though this more conservative asset mix doesn’t provide the same return potential as equities.
Women face unique retirement planning considerations
Retirement quick stats
Work with an Investment Advisor and plan to retire well
Whether it’s addressing lifestyle requirements, determining income sources or estate planning, being properly prepared for retirement demands a holistic approach that analyzes your individual financial circumstances and allows for the development of a retirement strategy focused on your needs and goals. If that sounds complex, it’s because it is. However, there are places you can turn to for invaluable help. Accessing professional financial advice can make the difference between retiring, and retiring well.